Tuesday, February 25, 2014

Cock fight dens refuse to accept pre-2005 notes

Stanley Pinto, TNN | Feb 24, 2014, 12.28PM IST

MANGALORE: The Reserve Bank's decision to withdraw all currency notes issued prior to 2005, including Rs 500 and Rs 1,000 denominations, after March 31, has had dual effect - panic in some sections and mitigation of Rs 5 shortage in other.

Though the central bank has urged the public not to panic and to actively co-operate in the withdrawal process'', panic has already set in in some of the unlikeliest sectors. Recently a customer called the Barke police saying the currency notes which he withdrew from an ATM on MG Road were fake.

The police asked him to come to the station and lodge a complaint the next day. But the person realized his folly that the currency notes were genuine but were issued prior to 2005. The bank manager also confirmed this and the person did not lodge a complaint.

The difference between pre- and post-2005 currency notes is the latter have the year of printing on the reverse. The year of printing in a small font is visible at the middle of the bottom row in notes issued after 2005.

More interesting is the local kori katta (cock fight) gambling dens refusing to accept currency notes issued before 2005. Kori kattas are places where lakhs of rupees are exchanged in betting in one single night. Having notes which will be withdrawn from circulation from April 1 would mean the currency notes which will never reach the bank have no value,'' said a patron of the cock fight.

But there has been positive impact too: Rs 5 shortage, which has been a perennial problem here, has been a thing of the past since pre-2005 Rs 5 currency notes have flooded the market. GG Mohandas Prabhu, former president, Kanara Chamber of Commerce and Industry and a trader in Bunder, said: "We have been receiving mint-fresh Rs 5 pre-2005 currency notes in large quantities. Those who have hoarded them are releasing them into the market. Since we deposit daily transactions at banks, we will not have problem with pre-2005 notes barring those who plan to hoard them,'' he said.

Kudpi Jagadeesh Shenoy, president, Dakshina Kannada District Hotel Owners' Association, said though his establishment has not received Rs 5 notes like in Bunder area, the shortage has been mitigated due to the RBI releasing enough coins of late. On whether hotels are refusing to accept pre-2005 notes, he said: "We prefer post-2005 currency notes. But we do not refuse pre-2005 either.''

TAKE NOTE

After March 31, 2014, RBI will completely withdraw from circulation all bank notes issued prior to 2005.

From April 1, public will be required to approach banks for exchanging these notes.

From July 1, persons seeking exchange of more than 10 pieces of Rs 500 and Rs 1,000 notes will have to furnish proof of identity and residence to the bank.